Giovanni Rigters - Penny Stocks For Beginners & Dummies

PENNY STOCKS FOR BEGINNERS & DUMMIES

By: Giovanni Rigters

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Chapter 4: Dn't Fr Pum and Dumps

Disclaimer

D isclaimer All the material contained in this book is provided for educational and informational purposes only. No responsibility can be taken for any results or outcomes resulting from the use of this material. While every attempt has been made to provide information that is both accurate and effective, the author does not assume any responsibility for the accuracy or use/misuse of this information

Introduction

T he penny tk market is n f the mt misunderstood mrkt in th wrld. S mn l ntr thi mrkt with littl knowledge but the skill t, trding tl, nd other tti tht r required to b uful. Everyone m t hv hrd f someone wh md thousands f dollars in nn tk, nd nturll, they wnt t do th m.

The fact f the mttr i nn tk n mk inrdibl rntg mv which ut th mjrit of thr t classes to hm, nd it doesn't take a tn f mn to get started. I n tell u frm xrin tht when u mk ur firt rfitbl trade, thr' no better fling in the world, but I mut wrn u tht th rd t profiting nitntl in the penny tk market in't m get rih quick scheme. Th false blif r th primary rn tht so mn l fail.

Th key to consistent rfit in nn tk r n mrkt fr tht mttr i to xtrt mll t medium size rfit nitntl nd compound ur profits. Th good nw i it's blutl ibl to d this n u rt yourself frm the lrg gru f gt-rih-quik kr lking for vrnight u.

Although trading nn tk bm rltivl tright frwrd once u knw what u r doing, it' not mthing you r ging t lrn instantly. If u think you r going to trt trding td with $300 and bm a millionaire by nxt wk, u r mltl delusional, and u nd to think gin.

Many -lld "guru'" will try to nvin u that u can d thi, but I can ur u they are ling tht th can sell u a rdut and make thmlv rih at ur expense. Everyone wnt t jum into trding hd first, but the truth i the tk mrkt will eat you liv if you gt involved withut rming yourself with the rr knwldg bfr u ut real mn on the lin. With that id, it's most undubtdl wrthwhil to lrn t trd, but u MUST be mrt but th rh that u tk. Sin u ikd up thi bk, u r trting n a positive nt, nd thi huld it u during your lrning h.

Chapter 1: Th Wrld of Pnn Stocks

B y dfinitin, nn stocks r tk tht trade fr l than $5.00 per hr, although today, m l will vn classify tk undr $15.00 as penny tk. Thi m und strange, but let m explain why thi i th . It' nt muh the ri r hr which defines whthr a stock huld b considered a penny stock, but rather th vltilit f the tk, whih defines hw quikl it n move u r dwn.

Penny stocks hv a high level of vltilit nd can make ignifint moves vr quickly, unlik th tk of tblihd companies whih typically mv rthr slowly. Fr this rn, thr are several t f nn tk that traders uull fu n. The first are listed nn stocks whih trd n wht i rfrrd to the big brd xhng, th NASDAQ (Ntinl Aitin f Suriti Dlr Autmtd Quttin), th NYSE (New Yrk Stk Exhng) nd the AMEX (Amrin Stk Exhng).

These r till rfrrd t as mll r microcap tk nd today many of th nn tk r vr tiv.

Tru penny stocks tull trd n th OTC Mrkt (Over th Cuntr Mrkt), whih r l knwn th OTCBB nd th Pink Sheet Stk but th two mrkt wr mbind, nd th r nw rfrrd t OTCBQX. Thr r actually two classifications f OTC nn stocks.

Th first type is tk tht trd vr $.01 r share, and th r jut rfrrd to tndrd nn tk. Th nd type is stocks tht trade fr l thn $.01. These are lld ub-nn tk, and ntrr t ulr blif, ub-nn tk r NOT gd t trd nmr, unl you enjoy ling money.

Sm of these tk trade fr $.005 a share nd others fr as littl $.0001! Nn th l, mn l r inftutd with th sub-penny tk bu th llw l to urh hundrd f thousands r millin f shares.

Littl do they rliz tht these t f tk r inrdibl mniultd nd have vr little trading volume, and th hn of profiting from thm consistently i near zr.

Th penny stock exchanges list m f the most vltil stocks in th wrld which funnl millin of dollars frm unuting nwmr nd ut it into the hnd f a specific gru of l. The key players r mll hedge funds nd Privt Equit firm tht dl with microcap tk, mrkt mkr, tk rmtr, and rfinl day traders.

Penny stocks n b bth a lurtiv nd risky method f invting your mn. Th stocks enjoy a wide appeal among invtr du t thir extremely inxniv purchase ri lng with thir high tntil fr nrmu rturn. These tk often trd fr anywhere from a frtin f n nt to a mximum f five dllr per share, allowing lmt anyone to ffrd to purchase a substantial munt f th tk.

Th risk itd with thi frm f investment i derived frm th lw urh price. Bginnr m become vr enthusiastic or bm rrid w with th notion f urhing hug munt of tk t such n ffrdbl ri. Before th knw it, they hv invested ubtntill mr thn they riginll intended nd may hv n a greater l thn they anticipated.

Further mliting matters i that the companies selling these tk m nt hv extensive records n thir financial hitri. This can lv l experienced invtr in the dark and often ld to blind trd in th h f getting luk nd mking a quick buck. On top of that, mtin n play a ignifint rt in causing ur trding t bm unuful. The vltilit and unrditbilit f th mrkt n ld vn th most seasoned invtr t make emotion drivn diin tht m nt be th mt rational decision.

Thu, when invting in thi market, it i imrtnt to nult with tru experts in th fild as wll as ndut ur wn du diligence. If you r a beginner, brw nlin frum nd bulltin boards in rdr t wht th more experienced traders are rditing will be a hot pick in th ming d or weeks. Oftn, xrind traders are mr thn happy t provide infrmtin freely on the frum, nd enjoy riving rdit for rrt ik when thir fllwr nj th profits.